The purchase of a home may be one of the biggest purchases and significant milestone for an individual especially when you are a first-time Home Buyer. If you are wanting to own a property, you will need to understand mortgages and regrettably in the world of mortgages for first-time Home Buyers, it may be a little intimidating. Just like you, we’ve been there.

In Short, Lets Break It Down:
 
What’s a Mortgage? It’s a loan to help finance the purchase of your new home! When you enter into a mortgage agreement, you are binding into a legal contract with the Lender with your home as a collateral.
The Mortgage Principal refers to the outstanding balance of your Mortgage. The Mortgage Principal reduces as your monthly mortgage payments are made over an agreed upon length of time which is referred to as an Amortization Period.
In Short, Lets Break It Down:
 
What’s a Mortgage? It’s a loan to help finance the purchase of your new home! When you enter into a mortgage agreement, you are binding into a legal contract with the Lender with your home as a collateral.
The Mortgage Principal refers to the outstanding balance of your Mortgage. The Mortgage Principal reduces as your monthly mortgage payments are made over an agreed upon length of time which is referred to as an Amortization Period.

The Amortization period is the fixed time period it takes to repay the mortgage loan. It can be between 10-25 years, but if you are qualified for a longer amortization period that means this will reduce your monthly payments. However, you will be paying more interest over the life of the mortgage.
Yup, the Interest Rates. In exchange for Lenders providing you with the mortgage you need, Lenders charge interest for the money borrowed. They’ll normally provide you with the option to choose a mortgage with a Fixed Rate or a Variable Rate.
 
Fixed Rate Mortgage: The payment you make monthly will be consistent for the term of your mortgage
 
Variable Rate Mortgage: The variable rate on the other hand, changes with the market often following the Lenders prime rate.
 

If you plan on making extra payments to pay down your mortgage as quickly as possible, then an Open Mortgage may be more suitable for you because of the flexibility in allowing you to make pre-payments but the interest rate for this type is higher. A Closed Mortgage limits how much more you can add to pay your mortgage down faster but this type of mortgage offers a lower interest rate and may have penalty fees if you exceed the payment limits set by the Lender

Now that you have the basic fundamentals down, keep in mind that there is a wide range of loan products so make sure you do your due diligence to ask which product can work the best for you. At Impact Condo Investments, our in-house Mortgage Specialist has all the right tools and is connected to over 60 Lenders to help complete your real estate needs. Contact us today!